Anadarko Petroleum Corporation SWOT Analysis / Matrix

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SWOT analysis is a vital strategic planning tool that can be used by Anadarko Petroleum Corporation managers to do a situational analysis of the firm . It is a useful technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Anadarko Petroleum Corporation is facing in its current business environment.

The Anadarko Petroleum Corporation is one of the leading organizatations in its industry. Anadarko Petroleum Corporation maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis a highly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.

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The SWOT Analysis framework enables an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Anadarko Petroleum Corporation to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Anadarko Petroleum Corporation swot analysis / matrix

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Anadarko Petroleum Corporation strengths, and eradicate its weaknesses.

Step by Step Guide to Anadarko Petroleum Corporation SWOT Analysis

Strengths of Anadarko Petroleum Corporation – Internal Strategic Factors

As one of the leading companies in its industry, Anadarko Petroleum Corporation has numerous strengths that help it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Anadarko Petroleum Corporation are –

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  • Strong distribution network – Over the years Anadarko Petroleum Corporation has built a reliable distribution network that can reach majority of its potential market.
  • Successful track record of developing new products – product innovation.
  • Superb Performance in New Markets – Anadarko Petroleum Corporation has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
  • Strong Brand Portfolio – Over the years Anadarko Petroleum Corporation has invested in building a strong brand portfolio. The SWOT analysis of Anadarko Petroleum Corporation just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Good Returns on Capital Expenditure – Anadarko Petroleum Corporation is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Highly skilled workforce through successful training and learning programs. Anadarko Petroleum Corporation is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
  • Automation of activities brought consistency of quality to Anadarko Petroleum Corporation products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Highly successful at Go To Market strategies for its products.

Weakness of Anadarko Petroleum Corporation – Internal Strategic Factors

Weakness are the areas where Anadarko Petroleum Corporation can improve upon. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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  • Investment in Research and Development is below the fastest growing players in the industry. Even though Anadarko Petroleum Corporation is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Anadarko Petroleum Corporation needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
  • Limited success outside core business – Even though Anadarko Petroleum Corporation is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
  • Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that Anadarko Petroleum Corporation is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.

Opportunities for Anadarko Petroleum Corporation – External Strategic Factors

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  • New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for Anadarko Petroleum Corporation. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
  • Government green drive also opens an opportunity for procurement of Anadarko Petroleum Corporation products by the state as well as federal government contractors.
  • The new technology provides an opportunity to Anadarko Petroleum Corporation to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Anadarko Petroleum Corporation’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
  • Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Anadarko Petroleum Corporation in other product categories.
  • The market development will lead to dilution of competitor’s advantage and enable Anadarko Petroleum Corporation to increase its competitiveness compare to the other competitors.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Anadarko Petroleum Corporation an opportunity to enter a new emerging market.
  • New trends in the consumer behavior can open up new market for the Anadarko Petroleum Corporation . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.

Threats Anadarko Petroleum Corporation Facing - External Strategic Factors

  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Anadarko Petroleum Corporation
  • Imitation of the counterfeit and low quality product is also a threat to Anadarko Petroleum Corporation’s product especially in the emerging markets and low income markets.
  • The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Anadarko Petroleum Corporation   in those markets.
  • Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
  • Rising raw material can pose a threat to the Anadarko Petroleum Corporation profitability.

Limitations of SWOT Analysis for Anadarko Petroleum Corporation

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

  • Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
  • SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
  • The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Anadarko Petroleum Corporation
  • SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
  • SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

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Weighted SWOT Analysis of Anadarko Petroleum Corporation

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Anadarko Petroleum Corporation managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Anadarko Petroleum Corporation

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

  • M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
  • A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
  • O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
  • L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
  • R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)